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Salyer American wants receiver removed, citing improper conduct

(UPDATED COVERAGE, 5:35 P.M.) Less than month after a court-appointed receiver took over operations at Salyer American Fresh Foods, Monterey, Calif., the company wants the receiver ousted, claiming he fostered a hostile work environment and improperly seized company assets.

Steve Franson took over Salyer American in May after the company’s lenders, led by Bank of the West, filed a lawsuit claiming Salyer American defaulted on $35 million worth of loans.

Both parties were due in Monterey County Superior Court on June 5, where Salyer American originally planned to back Franson’s confirmation. However, according to court documents, the company now will oppose it and see if a judge will grant selection of a new receiver.

The lenders want Franson to keep his position, citing his extensive professional background and the weakness of Salyer American’s arguments against Franson as primary reasons.

But, according to court documents, the lenders said they will find another receiver if the judge sides with Salyer American.

“None of these complaints constitute grounds for not confirming” Franson, the lenders said in May 29 court filings. They said Salyer American’s complaints “rarely rise above the level of whining.”

In court documents filed May 26, Donald Putterman, a San Francisco-based attorney representing Salyer American, claims Franson should be dismissed because he allegedly:

*had a brief “hostile” e-mail episode with former Salyer American president Eric Schwartz, former Salyer American senior vice president of sales and marketing Allan Sabatier, and SK Foods human resources executive Lisa Crist;

*possibly violated the Worker Adjustment and Retraining Notification Act when Franson closed Salyer American on May 22 and dismissed most of the company’s workers.

Two former Salyer American employees filed for a class-action lawsuit June 1 claiming SK Foods and Salyer American improperly dismissed hundreds of employees without notice.

“The biggest issue we believe in our view is (Franson) exceeded the scope of the court order,” Putterman said. Franson is only the receiver for secured assets, Putterman said, but “took over effective control of the corporation” and terminated employees, which should have been left to Salyer American staff.

Putterman said if the court decides to replace Franson, Salyer American will seek input on the selection.

Putterman said Franson didn’t need to immediately shut down the company and failed to provide the court with financial information showing Salyer American could be closed at the end of the Salinas season, with enough time to properly dismiss employees. Putterman said the class action lawsuit is a product of improper employee layoffs.

“He took the attitude with the staff that he had no obligation toward the employees whatsoever,” Putterman said.